State of the state: Retail
In the face of an unsettled economy, Ultimate Electronics is doubling down.
The Thornton-based retailer recently expanded into such categories as computers, DVDs and Blu-Rays, and iPods while investing $18 million into Denver-area stores and opening new locations in FlatIron Crossing in Broomfield and University Park in Denver.
Existing Denver-area stores were shut down for a month before the holiday season in order to undergo complete facelifts.
All things considered, it sounds like a pretty big bet the economy will bounce back just fine. "Hopefully, it's more calculated than that," says Mark Wattles, owner and CEO of the 10-state, 32-store chain since 2005. "But any time you're making an investment in a business, it's something of a gamble."
The founder and former CEO of Hollywood Video, Wattles has an ambitious long-term plan to take Ultimate Electronics national and go head-to-head with Best Buy and Wal-Mart in the wake of Circuit City's precipitous downfall last year. He was a large shareholder in the failed electronics retailer and attempted to right the company before it capsized.
Circuit City's failure "set the stage for the timing of the Ultimate Electronics expansion to be accelerated," says Wattles. "Now I'll do it by opening new stores rather than turning around an existing chain."
By the end of 2010, Wattles is aiming to open about 70 new Ultimate Electronics stores in markets largely in the Northeast and on the West Coast "from Seattle to San Diego."
He points out his experience at fast-growing national chains: Hollywood Video was opening at a store-a-day clip at its peak. "But these are bigger stores," he says of the bigger and better Ultimate Electronics locations. "Opening one of them is almost like opening 10 Hollywood Videos."